Simple auctions which do not require complex computations are available on the Internet. eBay.com, Onsale.com, and Priceline.com are representative of such auctions. Onsale, Inc. and Priceline, Inc. use customized software specific to their particular auction rules. However, none of these auctions automatically adjusts a bid submitted by a trader based upon factors such as the type of trader submitting the bid or a preference granted to a trader based upon the quantity of goods which he wishes to purchase. For example, a group of traders may be granted preferential treatment based upon the amount of goods that they have purchased in the past. Accordingly, bids submitted by these traders must be adjusted in some fashion to reflect the preferential treatment to the traders that may be granted by a market designer. In order for these auctions to incorporate such features, extensive labor would be required to modify the software to account for the various adjustments which may apply to a bid.
Toolkits embodied in software offered by Bonsai and Opensite may be used to construct and operate simple auctions. However, customization of an auction using these toolkits does not permit adjustment of a bid from a trader without significant labor.
In sum, the market designer of an Internet auction which includes adjustment on a bid has two options: develop software or expend significant labor to modify existing toolkits. Therefore, it is desirable to have a means to automatically adjust bids in Internet auction markets without engaging in lengthy software development.